Australia is running out of oil and the government is starting to raise the alarm over national security concerns, in stark contrast to LNG exports which rose by 3% in March to a record AU$2.8 billion delivering a 10-month high trade surplus of AU$1.5 billion.

This was revealed at the Association of Petroleum Production and Exploration Association Conference in Adelaide today by EnergyQuest CEO Graeme Bethune, who said that in 2017 oil imports had cost Australia $29 billion, compared to $26 billion in LNG earnings.

“Oil production in Australia has been falling since 2014 and is now the lowest since the 1960s. If it disappears altogether it will be as low as the 1950s, before Australia discovered any oil,” Bethune said.

Earlier, Australian Resources Minister, Senator Matt Canavan told conference delegates that the country had less than 50 days of fuel reserves that “puts us in real trouble”, and was not meeting International Energy Agency (IEA) obligations of maintaining 90 days of oil supply.

Senator Canavan said the issue had been red flagged as a national security priority by former army Major General turned New South Wales Senator Jim Molan, who is now campaigning for Australia to fortify its energy security by again becoming an abundant, net producer of oil.

“The Australian government is currently doing a liquid fuel review to see what vulnerabilities are and its starting to become a real political issue,” Canavan said. “One of the big reasons we fail to meet that mark is the domestic production of oil in Australia has fallen in the past few decades.”

Bethune said Australia had been a member of the IEA since 1979 but was not complying with its obligation. At present 88% of petroleum sales were derived from imports and only 12% from Australian indigenous crude.

“We have got the lowest fuel stocks of any IEA country. Japan has 180 days, New Zealand has 97 and the next lowest is Turkey with 91. Australia has 47. So, either Australia is incredibly smart internationally, or we are taking some risks here,” Bethune said.

Sen Canavan said the Northern Territory should be applauded for lifting the moratorium on fracking last month as a critical step towards shoring up fuel security by developing the country’s natural resources, particularly in the Beetaloo Basin in the far north of the country.

“Maybe the Beetaloo won’t be as prospective as my geologists say. But they tell me it could be as prospective as those shales in the United States, with current estimates of a billion barrels of oil. That can change quickly when exploration starts, but we need to stress to the Australian people that it is not just jobs in the NT. It’s not just the export revenue that might come from there. It is also the benefits that it might deliver in guaranteeing our fuel security, our independence and lowering our reliance on the rest of the world to ensure our domestic security,” Canavan said.

He said while Australia’s traditional oil production heartland in the Bass Strait was declining and becoming more costly, it was vital that the states of New South Wales and Victoria lifted onshore drilling bans to develop new resources.

“Thank God for the Queensland coal seam gas industry. If it had not been for the Queensland gas industry we would be in much, much worse trouble than we are because there would not be a net contribution from that area to meet our domestic gas needs. The Queensland gas industry does in net terms contribute 1,300 petajoules, or 13% of east coast demand to the market.

“While I do thank the Queensland gas industry, it is a costly form of production and there is no oil in coal seams and many more wells that have to be drilled. I recognise there is no way any government can defy the laws of economics and push the price of gas below the cost of production. That is why it is so important to try and find new areas and not give up and look at areas like the Beetaloo basin,” Canavan said.